RBI/2010-11/525
DBOD.Dir.BC.No.93 /08.12.14/ 2010-11
May 12, 2011
All Scheduled Commercial Banks
(excluding RRBs)
Dear Sir/ Madam,
National Disaster Management Guidelines on Ensuring Disaster Resilient
construction of Buildings and Infrastructure
The National Disaster Management Authority (NDMA), Government of India has
formulated guidelines on ensuring disaster resilient construction of buildings
and infrastructure financed through banks and other lending institutions (A copy
of NDMA guidelines of September 2010 is enclosed). The NDMA has observed that in
the context of disaster resilience there are certain critical gaps and the
guidelines aim at addressing these gaps in the current process of approving the
loan applications. It has been observed that the structural design of the
proposed buildings and structures are not completed before submitting the
application for a bank loan and no processes are in place at the banks to ensure
that disaster resilience has indeed been incorporated in the assets during the
design process at least before the construction begins.
- As it is in the interest of lenders to ensure that physical assets created
through their financing remain safe and disaster resilient, the guidelines
prepared by NDMA can be adopted by banks and made applicable to new
constructions as well as additions, modifications, extensions or alteration of
houses financed by them. Further, depending on the nature of the asset and the
vulnerability of the location to any of the disasters, banks could insist on
ensuring that the disaster resistant features of NDMA guidelines are
incorporated in the actual construction before the loan is sanctioned or
disbursed so that the disaster management features are built in at the design
stage itself.
- We have examined the NDMA guidelines in consultation with the Indian Banks’
Association and National Housing Bank and are of the view that adoption of the
guidelines would be in the interest of lenders and borrowers.
- We, accordingly, advise that banks should adopt the NDMA guidelines and
suitably incorporate them as part of their loan policies, procedures and
documentation.
Yours faithfully,
(P. R. Ravi Mohan)
Chief General Manager